On Tuesday, Coinbase, one of the largest cryptocurrency exchanges and brokerage giants, announced that effective immediately, their clients would be able to conduct transactions of USD Coin, a cryptocurrency that was launched initially by cryptocurrency unicorn Circle. This token is backed by physical dollars which are stored in bank accounts, controlled by the company. Regarding this decision to support, USDC stablecoin, they said,
“The advantage of a blockchain-based digital dollar like USDC is easier to program with, to send quickly, to use in dApps, and to store locally than traditional bank account-based dollars. That’s why we think of it as an important step towards a more open financial system.”
The firm also noted that stablecoins like USDC are the best suited for business purposes and e-commerce applications as these tokens are not vulnerable to price volatility and thus payment denominations in these tokens can be made at any time of the day, without the risk of price fluctuations as is common with Bitcoins or many other cryptocurrencies.
The underlying technology behind USDC is structured as an ERC-20 token on the Ethereum network, which Coinbase had been instrumental in building, in collaboration with Circle. Jeremy Allaire, co-founder and CEO of Circle, said,
“Coinbase joining us to co-found CENTRE and launch USDC reinforces the value of a shared, standard, interoperable stablecoin. Like internet standards, USDC is now not owned by one single company, but distributed among network participants according to clear rules, regulations, and collectively-owned software… When we began work on CENTRE and USDC last year, we envisioned collaborating with a consortium of industry leaders to set new standards for global value exchange and financial contracts. We’ve been thrilled to collaborate with Coinbase on CENTRE, and we look forward to welcoming more partners who share this vision.”
Coinbase and Circle, in partnership, have also set up the CENTRE Consortium, whose function is to basically look into the development in the issuance of USD Coins and other such stablecoins, which the consortium may venture into, in the near future.
USDC is, however, not presently listed on Coinbase Pro, though the company plans to remedy that in “the coming weeks.”